LONG TERM FINANCIAL PLAN - Kingborough Council...renewal capital expenditure for infrastructure assets over the next 80 years is shown below. The graph illustrates there are peaks

LONG TERM FINANCIAL

PLAN

2015 to 2025

Updated May 2016

Kingborough Council Updated November 2013 P a g e | 2

Table of Contents

1 EXECUTIVE SUMMARY ............................................................................................................................................ 3

1.1 Strategic Planning Framework ........................................................................................................................ 4

1.2 Current financial performance and position ................................................................................................... 4

2 LONG TERM FINANCIAL PLAN OVERVIEW ................................................................................................................... 7

2.1 Underlying Result ............................................................................................................................................ 7

2.2 Opportunities and Challenges ......................................................................................................................... 8

2.3 Planning Assumptions ................................................................................................................................... 10

3 OPERATING REVENUES ......................................................................................................................................... 11

3.1 Rates and Levies ............................................................................................................................................ 11

3.2 User Charges and Statutory Fees .................................................................................................................. 12

3.3 Grants - Operating ......................................................................................................................................... 13

3.4 Other Income ................................................................................................................................................ 13

3.5 Interest and Dividends .................................................................................................................................. 13

3.6 Grants - capital .............................................................................................................................................. 13

3.7 Contributions, Non Cash Contributions, Net Gain on Sale and Other Revenue ........................................... 14

4 OPERATING EXPENDITURE ..................................................................................................................................... 15

4.1 Depreciation .................................................................................................................................................. 15

4.2 Employee costs ............................................................................................................................................. 15

4.3 Materials and contracts, Other Expenses ..................................................................................................... 16

4.4 Levies to State Government .......................................................................................................................... 16

5 ANALYSIS OF ESTIMATED CASH POSITION ................................................................................................................. 17

5.1 Estimated Cash Flow Statement ................................................................................................................... 17

5.2 Cash flows from operating activities ............................................................................................................. 18

5.3 Cash flows from investing activities .............................................................................................................. 18

5.4 Cash flows from financing activities .............................................................................................................. 19

5.5 Restricted and unrestricted cash and investments ....................................................................................... 19

5.6 Statutory reserves ......................................................................................................................................... 19

5.7 Discretionary reserves ................................................................................................................................... 19

5.8 Cash at end of year........................................................................................................................................ 19

6 ANALYSIS OF ESTIMATED FINANCIAL POSITION ........................................................................................................... 20

6.1 Estimated Financial Position ......................................................................................................................... 20

6.2 Current Assets and Non-Current Assets ........................................................................................................ 20

6.3 Current Liabilities and Non-Current Liabilities .............................................................................................. 20

7 KEY FINANCIAL INDICATORS ................................................................................................................................... 21

7.1 Key Indicators and Financial Sustainability Benchmarks ............................................................................... 21

7.2 Underlying Result Ratio ................................................................................................................................. 21

7.3 Net Financial Liability Ratio ........................................................................................................................... 22

7.4 Asset Consumption Ratio .............................................................................................................................. 22

7.5 Asset Sustainability Ratio .............................................................................................................................. 23

8 SENSITIVITY ANALYSES ......................................................................................................................................... 24

8.1 Inflation Adjusted Expenditure ..................................................................................................................... 24

8.2 General Rates ................................................................................................................................................ 24

8.3 Stormwater Rate ........................................................................................................................................... 24

Appendix A Statement of Comprehensive Income…………………………………………..………………………………………………………23 Appendix B Statement of Financial Position…………………………………………………….………………………………………….……….....24 Appendix C Statement of Cash Flows…………………………………………..………………………………………………………………………..…25


Long Term Financial Plan 2015 to 2025

1 Executive Summary

The Long Term Financial Plan (LTFP) is an important component of the Council’s financial management

framework which will ensure that the Council can deliver on the strategies detailed in the Kingborough

Strategic Plan 2015-2025. The Strategic Plan provides the necessary direction for the future delivery of

services by the Council.

The key priority areas detailed in the 2015 Strategic Plan are;

A safe, healthy and supportive community

Sustainable land use and infrastructure management

A healthy natural environment

A vibrant local economy

Community leadership

A well administered organisation

The LTFP is a guiding document to consider when developing the annual plan and budget estimates rather

than a document that is dictating future decisions of Council, or what Council will spend. The LTFP reflects

the estimated amount of funds Council will have at its discretion in future years based on a number of

specific planning assumptions.

The LTFP also establishes greater transparency and accountability of Council to the community.

Financial sustainability is a key challenge facing local government due to several contributing factors

including increased demand for services, aging infrastructure, constraints on revenue growth, continuing

population growth, and cost increases in excess of CPI.

The LTFP aims to improve Council’s overall financially sustainability into the future. The key principles

underpinning the LTFP are:

Maintain a fair and equitable rating structure

Maintain current service levels

Continuous improvement in Council’s financial performance, so as to achieve operating surpluses

Progressively increasing funding for asset maintenance and renewal

Continuous improvement in Council’s financial position.

The LTFP covers the 10 year planning horizon from 2015 to 2025 and is updated on a regular basis. The

planning assumptions used in the development of the LTFP are explained within section 2.2.


1.1 Strategic Planning Framework

The LTFP is an important part of Council’s overall financial management framework. The following table

demonstrates the context of how the LTFP fits into Council’s overall financial management framework.

Long term planning (10 years +)

Our Vision

Medium term planning (3-5 years)

Strategic Plan

Goals and Key Objectives Strategic Plan 2010-2020 Strategic Delivery Plan 2010-2015

Short term planning (12 months)

Annual Plan and Estimates

Financial Statements Activities and Initiatives Key Strategic Activities Other Information

Accountability (Year End)

Audited Statements

Financial Statements Performance Statement

Our Vision Core Values Long Term Financial Plan Long Term Asset Management Plan

1.2 Current financial performance and position

An analysis of Council’s underlying financial performance since 2009/10 showed that there was an

unsustainable gap between operating expenditure and revenue. The transfer of water and sewerage

functions and activities to the newly formed Southern Water Corporation (now TasWater) had a significant

impact on Council’s financial outlook. Allowing an operational deficit to continue into the long term would

ultimately jeopardize the adequate funding of capital expenditure and Council’s capacity to maintain and

replace existing community assets.

Based on current service levels and the assumptions detailed in section 2.2, Council is intending to close the

gap between projected expenditures and projected income.

Council has attempted to curtail capital expenditure for new assets instead focusing on the renewal and

rehabilitation of existing assets. Council aims to maintain its infrastructure and assets at an acceptable

standard. This involves developing and integrating long-term infrastructure and asset management plans

with the LTFP to provide for the continued investment in maintenance, renewal and replacement of asset

stock.

A key project for Council over the next ten years will be the development of the former Kingston High

School site. While this project will provide significant benefits to the municipality in the long term, it will

have an impact on the financial performance of Council over the project period due to the need to borrow

funds to allow for capital expenditure on the site. At different stages through the project, land will be

released for sale to allow for a reduction in borrowings to minimise the cost impact. Unless grant funds are

received, there is an expectation that the project will leave Council with some borrowings that will need to

be paid off over future years.


Long Term Asset Management Plan

Infrastructure and Asset Management Plans have been developed to ensure that Council continues to provide effective and comprehensive management of its infrastructure asset portfolios. The Asset Management Plans are separate documents to the LTFP, however a high level summary is provided below as the funding for the capital works program is generated through an effective LTFP.

The asset renewal profile for infrastructure assets has been developed by modelling the expected asset remaining lives based on the known age of the infrastructure and their projected condition. The projected renewal capital expenditure for infrastructure assets over the next 80 years is shown below.

The graph illustrates there are peaks and troughs over the 80 year period representing the fluctuations in the annual value of expired infrastructure assets in any one year. Council’s Asset Management Plans dictate that consistent annual capital spend is the most effective approach in maintaining existing infrastructure.

The asset management plans therefore indicate that over the next 10 years Council should be spending approximately $5.9M (unadjusted for inflation) per annum on infrastructure capital renewal. The projected level of capital expenditure of $5.9M for the renewal and rehabilitation of infrastructure assets is consistent with Council’s five year capital works program. A significant asset maintenance program is in place to extend the lives of infrastructure assets.

Capital funding in excess of the $5.9M for capital renewal purposes could be available for upgrading or new infrastructure projects. This is particularly relevant for stormwater assets where there is a need for a significant upgrade due to capacity constraints. These capacity constraints have been caused by the significant growth in new developments causing downstream issues for stormwater. Without the expenditure, there is a possibility that the stormwater system will fail causing flooding issues for residents.

The $5.9M projected spend on infrastructure replacement is below the expected 2015/16 depreciation expense of $6.7M as depreciation includes assets with useful lives greater than 80 years, whereas this analysis does not. Plant and equipment assets are excluded from the above Asset Replacement Costs analysis.


Council should strive toward ensuring asset renewal and replacement expenditure is equal to depreciation for long term financial sustainability. However the above analysis highlights anything less than $6.5M in the short term is likely to result in existing infrastructure failing to provide the required level of services over the next 10 to 15 years. Further details on annual capital spend and funding is located within Section 5.3 – ‘Cash Flows From Investing Activities’.


2 Long Term Financial Plan Overview

2.1 Underlying Result

When evaluating an entity’s financial performance it is important to distinguish between operating and

capital items, as well as non-recurring one-off items.

The table below breaks down Council’s overall result to assist in assessing Council’s underlying financial

performance over the ten year period of the LTFP.

STATEMENT OF COMPREHENSIVE INCOME

2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25

$'m $'m $'m $'m $'m $'m $'m $'m $'m $'m

Total Recurring Revenue 34.1 36.1 37.5 39.0 40.6 42.2 43.9 45.7 47.5 49.4

Total Recurring Expenses 35.1 36.7 37.9 39.4 40.5 41.7 43.1 44.6 46.1 47.6

Underlying Surplus (Deficit) before Capital items (1.0) (0.6) (0.4) (0.4) 0.1 0.5 0.8 1.0 1.4 1.8

Capital Grants 1.1 1.3 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4

Contributions - non cash 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1

Net Gain from Sale of Assets 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Carrying Amount of Assets Retired (0.8) (0.7) (0.6) (0.5) (0.4) (0.3) (0.3) (0.3) (0.3) (0.3)

Other Non-Recurring Items 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

NET SURPLUS (DEFICIT) (0.5) 0.2 (0.5) (0.3) 0.3 0.8 1.1 1.3 1.6 2.0

Note: Amounts in the tables have been rounded to the nearest hundred thousand.

Council’s underlying surplus before capital items is estimated to improve from a deficit of $1.0M in 2015/16

to a surplus of $0.1M in 2019/20.

The 2015/16 overall net result, a net deficit of $0.5M, is due to the receipt of additional capital grants being

offset by an expected $0.8M write-off on the carrying amount of assets retired.

The development of the former Kingston High School site will result in Council requiring borrowings over

the ten year period, which in turn will add an interest cost to expenditure. The LTFP includes borrowings of

$3.0M in 2015/16 to fund the acquisition of the site and demolition of buildings. It is expected that from

2022 onwards, Council will be left with a $5.0M debt from the high school site that will need to be paid

over the next five years. Council currently has submitted a proposal for a $5.0M grant with the federal

government, however due to uncertainty around the receipt of that grant, the $5.0M has not been

included in the cash flows.

An overall net surplus by 2019/20 would be a strong achievement in light of increasing depreciation and

maintenance costs for Council. A surplus by 2019/20 is dependent on the effective management of services

and related costs.

The LTFP expresses Council’s commitment towards striving to improve the underlying result and ensure

depreciation is fully funded and break-even overall net results are consistently achieved in future financial

years.

The following sections discuss the planning assumptions used in deriving the LTFP and provide further

explanations on each of Council’s main revenue and expenditure line items. The final section provides a

trend analysis using a number of financial sustainability indicators and ratios.


2.2 Opportunities and Challenges

It was highlighted in the 2011 Census that Kingborough is one the fastest growing municipalities in the state

with a population increase of 9.9% during the period 2006 to 2011. This is significantly higher than the

overall Tasmanian population increase within the same period of 4.0% and higher than the Australian

average of 8.3%.

The graph below is from a State Government Report in 2014 on projected population growth for local

government for the period 2013 to 2037. It highlights that Kingborough is expected to have the highest

growth in population during that period.

The population growth for Kingborough is essentially being driven by migration into the municipality, which

is motivated by both personal choice (based on the area’s natural attractions) and economic factors (such

as the availability of suitable residential land and housing). The 2011 Census shows that the largest groups

moving to Kingborough in the last five years came from other states and territories (2,352) and from Hobart

(1,367).

Kingborough continues to experience the impacts of the ‘sea change’ phenomena. New residents are

coming to retire or to live in the naturally beautiful environment. Kingborough offers opportunities for new

residents with residential land within relatively easy commuting distance to Hobart. This convenience,

together with increasing retail, service and educational opportunities and pleasant urban and rural

surroundings, is a strong attraction for new residents.

Australian Bureau of Statistics data shows that the median age of Kingborough residents was 40, which is

also the median age for Tasmania overall. There were 5,140 people over the age of 65 in Kingborough

which represents 15.2% of the total population.

In the Kingborough municipality there is currently underway a number of large residential developments

with around 1,000 new home sites becoming available over the life of the LTFP. Council is responding to


this growth by redeveloping central Kingston and the former high school site. One of the important

objectives of the KHS development is to increase commercial investment in the central business district to

create a commercial district that can adequately serve the population south of Hobart. Council will require

significant capital outlay over the term of the LTFP to ensure adequate infrastructure is available to support

the expected growth.

Some of the other population and social characteristics for Kingborough that are expected to continue into

the future include:

A relatively high median household income. The median weekly household income for Kingborough

was reported as $1,208, significantly higher than the $948 for Tasmania.

Relatively low unemployment rates. The unemployment rate for Kingborough on Census night was

4.6% compared to 6.4% in Tasmania. In Kingborough, 62.6% of residents were in the labour force,

compared to 57.8% in Tasmania. Residents were employed in education, government

administration and services industries. The most common occupations included Professionals

25.5%, Clerical and Administrative Workers 16.3%, Technicians and Trades Workers 13.6%,

Managers 13.3%, and Community and Personal Service Workers 10.4%.

Relatively high education standards. In Tasmania, 51% of the population had year 12 and above

qualifications, compared to 64% in Kingborough.

Relatively high internet use. Nearly 82% of households were connected to the internet, compared

to 74% in Tasmania.

More affluent socio-economic profile, as the Census results show that Hobart and Kingborough are

the most advantaged local government areas in Tasmania. However, there are pockets of

disadvantage in the municipality, such as the Kettering/Bruny Island statistical area with a reported

median weekly income of $877 and a 6.3% unemployment rate.

There are other statistical results that are also relevant. For example, Kingborough displays relatively high

commuter characteristics with over 14,465 residents travelling for work outside of Kingborough, out of a

total of 16,813 who reported being in the labour force in the week before Census night. Only 5% of

residents travel to work by public transport (bus) with most travelling by car.

Key Statistics

Kingborough Tasmania

Population 33,893 513,000

Population increase 2006-2011 9.9% 4.0%

Median age 40 40

% aged over 65 15.2% 16.0%

Dwellings with internet access 82% 74%

Rent payments >30% of household income 7.5% 9.5%

Mortgage payments >30% of household income 8.7% 7.5%

Median weekly household income $1,208 $948

Households with gross weekly income <$600 22.0% 30.7%

Households with gross weekly income >$3,000 8.6% 5.4%

Kingborough residents working in Kingborough 16.1%

Unemployment 4.6% 6.4%

Source: ABS census 2011

The next Census will be conducted in 2016.


2.3 Planning Assumptions

The base for the preparation of the LTFP is the Annual Plan Estimates for 2014/15, with one-off or non-

recurring events adjusted for.

The LTFP has been prepared by setting percentage increases for various classes of expenditure and income

and then reviewing each high level line item where a variance to the pattern is likely to occur.

The planning assumptions used in the development of the LTFP are summarized in the table below.

REVENUE CATEGORY COMMENTARY

Rates and Levies Indexed at 4.0% annually A stormwater rate of $56 per household

Rates Growth Annual increase of 0.5%

User Charges Indexed at 3.0% annually

Operating and Capital Grants Indexed at 3.0% annually

Interest Revenue Based on expected return of 3.0% of Council’s year-end cash balance

Other Revenue and Contributions Indexed at 3.0% annually

EXPENDITURE CATEGORY COMMENTARY

Materials and Contracts The plan currently assumes a flat increase across all materials and contract expenditure of 1.5% to 2020

Employee Costs Indexed to allow for performance based progression and annual award movements. Combined index estimated at 3.3%

Depreciation Indexed to reflect increase in valuation of infrastructure assets (3.0%) and annual capital work program additions

Other Expenses Indexed at 2.5% annually


3 Operating Revenues

This section analyses the projected revenues of Council from 2015/16 to 2024/25. The table and graph

below summarise movements in Council’s key revenue streams over the ten year period.

2015/16 2019/20 2024/25

Revenue Type $'000 $'000 $'000

Rates & Levies 23,020 28,474 35,520

Statutory fees and fines 1,129 1,244 1,442

User Charges 2,756 3,006 3,484

Grants - Operating 3,752 4,133 4,791

Other Income 3,430 3,741 4,144

Total Operating Revenue 34,087 40,598 49,382

Grants - Capital 1,140 400 400

Contributions 144 144 144

Net Gain From Sale of Assets - - -

Non Cash Contributions - - -

Other Revenue 33 0 0

Total Revenue 35,404 41,142 49,926

3.1 Rates and Levies

The LTFP assumes the annual general rate increase from 2015/16 to 2024/25 will be 4%. This assumption is

in line with previous year increases whereby Council takes into account the Consumer Price Index, the Local

Government Association of Tasmania’s council cost index and the Access Economics report on the financial

sustainability of Tasmanian Councils.

The LTFP also assumes the introduction of a Stormwater Removal Rate in 2016/17 of $56 per household.

The Stormwater Rate will be used to fund the essential upgrades to the current stormwater system which is

struggling to cope with the increased usage that it being placed on it. This charge will be indexed in line

with the increases to the general rate.

The revenue from the Stormwater Removal Rate will fund Council’s flood management activities and

provide for the replacement of elements of the stormwater and waterways asset base. As such these

services have a public and community wide benefit.


The Stormwater Removal Rate will also contribute towards stormwater works in all roads, which allows

residents to travel along those roads safely during rainfall events. It adds to the existing litter traps within

stormwater systems and waterways to limit the amount of pollution entering the River Derwent.

Population growth impacts Council’s financial performance by firstly increasing its rates revenue, and

secondly increasing expenditure resulting from increased demand for services.

The LTFP assumes a 0.5% annual increase in rate revenue through growth in the number of rateable

properties. For example in 2015/16 Council estimates that $114,000 of additional revenue will be received

through supplementary rating. This assumption is based on the average growth in rateable properties in

Kingborough over the past 4 years.

The increase in expenditure due to increase in demand for services from population growth is addressed

within section 4 below.

There are a number of properties which are public, educational, religious or charitable in use or ownership

and which are in part, or in full, exempt from general rates. The level of annual remissions estimated in the

LTFP is consistent with recent decisions regarding exemptions provided to charitable institutions.

The fixed charge component of the general rate for the rehabilitation of the former landfill site at Barretta is currently $63 for every property and this will cease at the end of the 2015/16 year. Garbage collection charges and recycling charges are estimated to increase by 4% annually over the period. This increase is consistent with the estimated increase in related expenditure for these services. The increase in the three fire rate levies that Council collects on behalf of the Tasmanian Fire Commission are also offset by an identical increase in the related expenditure payment.

3.2 User Charges and Statutory Fees

User charges relate to the recovery of service delivery costs through the charging of fees to users of

Council’s services. These include the hire of halls and sporting grounds, Kingborough Sports Centre fees,

family day care fees, and private works recoveries. The key principle in setting user fees has been to ensure

that increases approximate CPI increases or market levels.

Statutory fees and fines relate mainly to those levied in accordance with legislative requirements. They

include, building fees, planning fees, health related fees, parking fines, and animal registrations.

Council’s user charges and statutory fees may be influenced by CPI increases and additional operating

revenue streams.

The LTFP assumes an increase in user charges and statutory fees consistent with an estimated CPI of

around 3%.


3.3 Grants - Operating

Operating grants are funds received from both the State and Federal Government for the purpose of

delivering Council services.

The main source of grant revenue is from the State Grants Commission (SGC) in the form of Financial

Assistance Grants (FAG). Council has little control over the level of FAG received with changes likely to

occur as a result of a change in population or distribution methodologies.

The FAG’s are fixed for a two year period until 2017/18 at which time it is expected that they will grow by

3% over the remaining period of the LTFP. It is unlikely that there will be any increase in grants, or provision

of new grants, for current services. Any reduction or discontinuance of grants will need to be offset by a

corresponding reduction in expenditure.

3.4 Other Income

Other Council revenue has been increased 3% annually in line with projected CPI and comprises:

government rates remission reimbursements,

reimbursement for State Government works,

private works income,

motor tax reimbursement,

salary and other reimbursements.

3.5 Interest and Dividends

Estimated interest income over the ten year period is derived from Council’s expected cash position at the

end of each financial year using an estimated market rate of 3.0%.

The level of interest revenue falls until 2016/17 due to withdrawal of funds to supplement the capital works

program. Interest revenue then gradually increases from $0.218M in 2016/17 to $0.426M in 2024/25 in line

with Council’s cash balance.

As part owner of the Tasmanian Water & Sewerage Corporation (Southern Region) Pty Ltd, Council is

entitled to receive dividends. It is expected that the level of dividends declared will be $1.85m in 2016/17.

There is a possibility that changes to Government policy may put all or part of this income at risk.

3.6 Grants - capital

Capital grants include all monies received from State, Federal and community sources for the purposes of

funding the capital works program. The LTFP reflects the Commonwealth Roads to Recovery funding,

$1.14M in 2015/16 and $1.32M in 2016/17 before reducing back to $0.4M from 2017/18.

In accordance with Council’s budget principles the capital grant income related to potential grant

applications in the future were not factored into the LTFP.

Any additional Capital funding received will not impact on the underlying operating result as the funds will

be expended on new capital projects.


3.7 Contributions, Non Cash Contributions, Net Gain on Sale and Other Revenue

The revenue reported under contributions relate to external funds received from developers under the

Public Open Space and Tree Preservation policies, or other contributions received from the public for

capital works or operational purposes. The level of contributions from 2015/16 to 2024/25 reflects a

conservative estimate of an annual CPI adjustment of 3.0%.

Non cash contributions are made up of assets donated to Council from property developers in the form of

infrastructure (roads and storm water etc) where at the completion of the development, Council assumes

responsibility for maintaining and replacing the infrastructure. As developer contributions are non-cash

and capital in nature they do not affect the underlying operating result and have therefore been excluded

from the LTFP.

Should Council dispose of any property during the ten year period this would be considered as additional

revenue. Other revenue reflects non-recurring revenue such as FAG’s paid in advance.


4 Operating Expenditure This section analyses the expected expenditure of Council from 2014/15 to 2024/25. The table and graph

below summarises the movements in Council’s key expenditure items over the ten year period.

2015/16 2019/20 2024/25

Expenditure Type $'000 $'000 $'000

Depreciation 7,992 9,617 11,959

Employee Costs 13,099 15,205 17,885

Materials &Contracts 8,978 9,697 10,972

Other Expenses 3,661 4,037 4,568

Borrowing Costs - 306 200

Levies to State Government 1,350 1,600 1,994

Total Operating Expenditure 35,079 40,462 47,578

4.1 Depreciation

Depreciation is an accounting measure which allocates the value of assets over their useful lives.

Council’s infrastructure assets are held at depreciated replacement cost to ensure adequate provision for

renewal of existing infrastructure through depreciation expense. The amount spent on asset renewal in

any given year is determined by Council’s longer term capital works program.

Depreciation is estimated to increase $4.0m or 50% from 2015/16 to $12.0M in 2024/25. The increase

reflects the additional depreciation expense for capital projects completed as part of the annual capital

works program. In particular, the capital expenditure on the Kingston High School site will have a significant

impact. Infrastructure contributions from developers and the annual revaluation of infrastructure

(estimated at 3.0%) also increase the level of Council’s depreciation expense.

4.2 Employee costs

Employee costs include all salaries and wages and all employment related expenses including payroll tax,

employer superannuation, leave entitlements, fringe benefits tax, workers compensation insurance and

professional development.


Employee costs are estimated to increase $4.8m or 36% from 2015/16 to $17.9m in 2024/25. The increase

in Council employee costs reflect an estimated Enterprise Bargaining Agreement percentage increase and a

percentage increase for performance based progression.

Employee numbers and costs need to be carefully managed into the future. Growth in employee costs

which exceeds the percentage increase in rates is unsustainable. Increased staff numbers as a result of

implementing new services and enhancing existing services need to be minimised. The LTFP assumes that

staff numbers are maintained at 2015/16 levels and that productivity improvements will provide funding

for future staff requirements..

4.3 Materials and Contracts, Other Expenses

Materials and contracts include the purchase of consumables, payments to contractors for the provision of

services, insurances, and utility costs. Utility costs relate to telecommunications, water, sewerage, and

electricity.

Materials and contracts, and other expenses are estimated to increase $1.9m or 22% from 2015/16 to

$11.0M in 2024/25.

As part of the productivity drive throughout Council material and contracts costs have only been increased

by 1.5% up until 2020. The savings achieved in this area will be as a result of the current efficiency program

aimed at reducing the costs of service delivery.

Despite the significant service delivery pressures, through controlling cost increases Council aims to

maintain the level of growth in materials and contracts expenditure to 2.5% from 2021 onwards.

The half a percent growth in rates through increased rateable properties, including new houses is not

expected to have a significant impact on the level of ‘non-recoverable’ service costs. It is reasonable to

assume new subdivisions would require minimal maintenance over the period of this LTFP. Street lighting

and street sweeping are potential ‘new’ costs which are not directly recoverable, however these are

expected to be minimal.

4.4 Levies to State Government

Levies to State Government include land tax and state fire levies. State fire levies are collected on behalf of

the State Fire Commission. These funds are passed directly to the State Fire Commission and Council has

no control over the levies.


5 Analysis of Estimated Cash Position

5.1 Estimated Cash Flow Statement

This section analyses the projected cash flows from the operating, investing and financing activities of

Council from 2015/16 to 2024/25. The cash flow from operating activities is a key factor in determining the

level of capital expenditure that can be sustained without using existing cash reserves.

The analysis is based on three main categories of cash flows:

1. OPERATING ACTIVITIES

Refers to the cash generated or used in the normal service delivery functions of Council. Cash

remaining after paying for the provision of services to the community may be available for

investment in capital works, or repayment of debt.

2. INVESTING ACTIVITIES

Refers to cash generated or used in the enhancement or creation of infrastructure and other

assets. These activities also include the acquisition and sale of other assets such as vehicles,

property and equipment.

3. FINANCING ACTIVITIES

Refers to cash generated or used in the financing of Council functions and include borrowings from

financial institutions and advancing of repayable loans to other organisations. These activities also

include repayment of the principal component of loan repayments for the year.

The table below summarises Council’s net cash flows over the ten year period.

STATEMENT OF CASH FLOWS

2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25

$'m $'m $'m $'m $'m $'m $'m $'m $'m $'m

Net Cash Flow from Operating Activities 7.7 7.4 7.9 8.2 9.0 9.7 10.4 10.9 11.7 12.4

Net Cash Flow used in Investing Activities (9.9) (15.0) (11.3) (13.6) (7.7) (5.4) (8.6) (11.6) (12.1) (12.7)

Net Cash Flow from Financing Activities 1.3 7.3 3.7 5.4 (1.7) (4.6) (3.0) (0.6) (0.6) (0.6)

NET (DECREASE)/INCREASE IN CASH HELD (0.8) (0.3) 0.3 (0.0) (0.3) (0.3) (1.2) (1.3) (1.1) (0.8)

Cash at the Beginning of the Year 10.5 9.7 9.5 10.0 10.2 10.2 10.5 9.8 9.3 9.0

CASH AT THE END OF THE YEAR 9.7 9.4 9.8 9.9 9.9 10.0 9.3 8.6 8.2 8.2

Statutory Reserves (1.0) (1.0) (1.0) (1.0) (1.0) (1.0) (1.0) (1.0) (1.0) (1.0)

Descretionary Reserves (3.6) (3.6) (3.6) (3.6) (3.6) (3.6) (3.6) (3.6) (3.6) (3.6)

Other Commitments (1.5) (1.5) (1.5) (1.5) (1.5) (1.5) (1.5) (1.5) (1.5) (1.5)

Carried Forwards (1.0) (1.0) (1.0) (1.0) (1.0) (1.0) (1.0) (1.0) (1.0) (1.0)

UNRESTRICTED CASH AT YEAR END 2.5 2.3 2.7 2.8 2.7 2.8 2.1 1.4 1.1 1.1


The graph below shows the cash balance over the ten year period of the LTFP. It highlights that Council will be maintaining a level of cash reserves above $9.0M for the period of the plan.

5.2 Cash flows from operating activities

The net cash flow from operating activities is estimated to increase from $7.7M in 2015/16 to $13.4M in

2024/25. The increase comprises an increase in receipts from ratepayers and user charges of $12.8M,

which is partially offset by an increase in payments to suppliers and staff of $7.7M.

The net cash flow from operating activities in 2024/25 of $13.4M is considered ‘reasonable’ from a financial

sustainability viewpoint as it allows appropriate funding of asset renewals and the development of

upgraded or new assets.

5.3 Cash flows from investing activities

Funds available for the capital works program (including carry forwards) are estimated to be between

$12.0M and $16.0M during the ten year period. In 2016/17, the available funds have been boosted by an

additional $1 million in roads to recovery funding and the repayment of $1.8 million lent to the high school

site project to fund the demolition and initial planning phase.

This capital expenditure funding allows for the renewal and upgrade of existing assets, the creation of new

assets and the expenditure of $4.7M on the high school site. Funding for the renewal of infrastructure

assets has been set at 80% of depreciation expense until 2020 and then increases to 90% for the life of the

plan.

The increase in the capital works program is primarily funded by increased cash from operating activities.

There will however be some borrowings to fund the new works at the high school site.

The asset management plans indicate that over the next 10 years Council should be spending

approximately $5.9M (unadjusted for inflation) per annum on asset renewal.

Capital funding in excess of the $5.9M required for asset renewal purposes would be available for upgraded

or new infrastructure projects.


5.4 Cash flows from financing activities

During 2010/11 Council became debt free by making its final principal repayment on long term borrowings.

However to fund the capital works on the Kingston High School site, Council will need to borrow funds

during the early stages of the project. Once land is sold, the borrowings will be repaid commencing from

2020 onwards until the debt is repaid in 2030.

5.5 Restricted and unrestricted cash and investments

Cash and cash equivalents held by Council are restricted in part, and not fully available for Council’s

operations. The forecasted unrestricted cash balance is detailed at the bottom of the Statement of Cash

Flows.

5.6 Statutory reserves

Statutory reserves are funds that must be used in accordance with legislative and contractual obligations.

These funds are not available for any other purpose. It is estimated that Council will have subdivision

infrastructure related deposits of $1.0M throughout the ten year period.

5.7 Discretionary reserves

Discretionary funds are set aside by Council for a specific purpose and unless there is a Council resolution

these funds should only be used for those purposes. The estimated discretionary reserve balances for the

financial year ends are shown in the below table. For the purposes of the LTFP the reserve balances are

maintained at the same level throughout the ten year period as detailed below.

RESERVE

$'000

Public Open Space 1,250

Car Parking 50

Boronia Hill Reserve 10

Plant Replacement 870

Office Equipment Replacement 100

Hall Equipment Replacement 70

Sports Centre Equipment Replacement 100

Emergency Reserve 150

Emergency Services Reserve 10

Tree Preservation Reserve 300

IT Reserve 600

Administration Reserve 100

TOTAL 3,610

5.8 Cash at end of year

Overall the total unrestricted cash at year end is forecasted to remain around the $2M to $3M mark. This

buffer should be sufficient while Council is repaying the debt associated with the high school site and will

increase once that debt is repaid.


6 Analysis of Estimated Financial Position

6.1 Estimated Financial Position

This section analyses the projected movements in assets, liabilities and equity from 2015/16 to 2024/25.

STATEMENT OF FINANCIAL POSITION

2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25

$'m $'m $'m $'m $'m $'m $'m $'m $'m $'m

Total Current Assets 10.8 10.6 11.1 11.4 11.4 11.6 11.0 10.4 10.2 10.3

Total Non-Current Assets 611.4 640.7 670.0 702.6 733.9 766.7 800.7 835.6 872.2 910.3

TOTAL ASSETS 622.2 651.4 681.1 713.9 745.3 778.3 811.7 846.1 882.3 920.6

Total Current Liabilities 7.7 13.8 17.2 22.2 14.6 14.0 13.1 15.2 14.3 13.3

Total Non-Current Liabilities 0.6 0.6 0.7 0.7 0.7 0.7 0.7 0.7 0.8 0.8

TOTAL LIABILITIES 8.4 14.4 17.8 22.9 15.3 14.8 13.8 15.9 15.0 14.1

NET ASSETS 613.9 636.9 663.3 691.1 730.0 763.6 797.8 830.1 867.3 906.5

TOTAL COMMUNITY EQUITY 613.9 636.9 663.3 691.1 730.0 763.6 797.8 830.1 867.3 906.5

6.2 Current Assets and Non-Current Assets

Current assets comprise cash, investments and receivables. Current assets are estimated to remain around

$10M for the period of the Plan .

Non-current assets primarily include infrastructure assets. Non-current assets are estimated to increase

$298.9M. This movement is primarily due to the 3.0% annual revaluation of assets as well as the capital

expenditure on the high school site.

The estimated value of other non-current assets including Council’s investment in TasWater and

investment in Copping Waste Authority are estimated to remain stable.

6.3 Current Liabilities and Non-Current Liabilities

Liabilities include creditors, employee provisions and other liabilities.

The balance of payables is difficult to predict as it depends mainly on the progress and timing of capital

works.

It has been assumed that the level of staff positions will remain reasonably static and that leave balances

will be managed so that leave provisions remain constant. The rehabilitation of the Barretta tip site is

expected to be completed in 2015/16 and therefore the provision for this cost will be fully written down

during that year. All other current liabilities will remain relatively constant.


7 Key Financial Indicators

7.1 Key Indicators and Financial Sustainability Benchmarks

The following graphs illustrate the key financial indicators over the ten year period of the LTFP.

It is important to note that the ratios are only indicators of financial performance and should not be

considered in isolation when determining financial sustainability. It is important to consider the ratios over

time to consider trends. The results taken together over time indicate financial performance.

The Auditor General compared the financial sustainability of Councils by using generally accepted key

financial ratios. The Auditor General uses the following ratios to measure the sustainability of a local

government entity which are interrelated and enable both self analysis and comparative analysis with other

local government entities. The ratios used are below.

7.2 Underlying Result Ratio

The underlying surplus ratio expresses the operating surplus as a percentage or the recurring operating

income. A result greater than 0.0% indicates a surplus, the larger the surplus the stronger the result and

therefore stronger assessment of sustainability. A negative result indicates a deficit which cannot be

sustained in the long term.

The underlying surplus ratio is calculated from using revenue from the comprehensive income statement

adjusted for capital grants income, developer contributions and any other material one-off (non-recurring)

items of revenue.

The underlying surplus ratio for 2015/16 is included is below the Benchmark of 0.0% and indicates Council

is not currently fully funding its depreciation expense. However over the ten year period the ratio is

trending upwards and an underlying surplus ratio above 1.2% is achieved in 2020/21. The result in 2024/25

of a 3.7% operating surplus ratio is a healthy result and provides adequate funding to meet the service

delivery requirements of Council.


7.3 Net Financial Liability Ratio

This measure shows whether Council’s total liabilities can be met by its liquid assets. An excess of total

liabilities over liquid assets means that, if all the liabilities fell due at once, additional revenue would be

needed to fund the shortfall.

Whilst Council’s percentage in 2015/16 is over the 0.0% benchmark, the borrowings associated with the

construction at the Kingston High School site lead to the negative ratio in 2020/21. Once the loan is repaid,

the ratio will move to a positive number.

7.4 Asset Consumption Ratio

The asset consumption ratio indicates the level of service potential available in Council’s existing asset

base. The ratio is calculated by dividing the depreciated replacement cost over the current replacement

cost and is an indicator of the remaining useful life of the infrastructure asset. The benchmark for this ratio

is between 50% and 80%.

The above ratio for Council’s roads, indicate that there is a high level of service potential available within

the existing asset base. Also a positive sign is that the ratio is increasing over the ten year period as a result

of capital expenditure on the road network.


The asset consumption ratio for drainage assets shows a high level of service potential as well as an

increasing ratio over the ten year period. This is a reflection of the need to upgrade drainage assets to meet

the increasing demand of the municipality.

7.5 Asset Sustainability Ratio

The asset sustainability ratio indicates whether a Council has been maintaining existing assets at a

consistent rate. The ratio is calculated as the total capital renewal expenditure divided by depreciation

expense. A result of greater than 100% indicates that spending on existing assets is greater than the rate of

depreciation base. The benchmark result is 100%.

The above graph shows that Council is struggling to meet the 100% benchmark for capital expenditure on

asset renewal. While this shortfall is sustainable in the short term, it would be of a concern if the trend

continued over an extended period.

This ratio highlights the need for Council to continue to build cash reserves, through the generation of an

operating surplus, to allow increased expenditure on asset infrastructure. Once this is achieved, an asset

sustainability ratio above 100% will be delivered.


8 Sensitivity Analyses

8.1 Inflation Adjusted Expenditure

The assumptions related to the revenue streams and expenditure line items may have a significant impact

on the long term forecast result of Council. The level of inflation adjusted expenditure is likely to be the

most subjective and has the greatest potential to significantly impact the LTFP.

The below analysis demonstrates the sensitivity of the LTFP to changes in the level of expenditure that is

increased by the inflation rate.

The LTFP assumes that certain expenditure increase in line with the expected inflation rate of 2.5%. If the

rate of inflation is 1.0% above the assumed rate, then the effect will be as follows:

2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25

$ $ $ $ $ $ $ $ $

Yearly Variance 92,980 188,284 285,957 386,044 489,562 596,606 707,275 821,668 939,888

Accum Variance 92,980 281,264 567,221 953,264 1,442,826 2,039,432 2,746,707 3,568,376 4,508,264

Operating Surplus (2,076) (803) (797) (837) (430) (144) 87 294 572

Over a 9 year period Council would have generated $4.5M less in cash flow as a result of the inflation rate

being 1.0% greater than expected.

The impact on the Operating Surplus would be significant with a return to an operating surplus delayed

until 2023 rather than the proposed 2020 surplus.

Both these outcomes are considered unsatisfactory and clearly demonstrate the importance of limiting the

level of annual increases in expenditure to 2.5%.

8.2 General Rates

The below analysis demonstrates the sensitivity of the LTFP to changes in the level of rates income.

The LTFP assumes a 4.0% annual increase in rates. If the assumption is changed to 3.0 % the dollar impact is

calculated as follows:

2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25

$ $ $ $ $ $ $ $ $

Yearly Variance (226,774) (466,021) (718,325) (984,295) (1,264,571) (1,559,819) (1,870,736) (2,198,052) (2,542,529)

Accum Variance (226,774) (692,796) (1,411,121) (2,395,416) (3,659,987) (5,219,805) (7,090,542) (9,288,594) (11,831,122)

Operating Surplus (2,209) (1,081) (1,229) (1,435) (1,205) (1,107) (1,077) (1,082) (1,031)

Over the nine year period Council would have generated $11.8M less in cash as a result of a 3.0% annual

increase in rates than 4.0% to 2020/21. This would result in Council needing to borrow funds to continue

operating as a going concern.

Also no operating surplus would be achieved during the life of the LTFP.

8.3 Stormwater Rate

The LTFP is based on the introduction of a stormwater rate of $56 per eligible household.

The impact of not introducing the stormwater rate is shown below:


2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25

$ $ $ $ $ $ $ $ $

Yearly Variance (945,000) (992,628) (1,042,656) (1,095,206) (1,150,405) (1,208,385) (1,269,288) (1,333,260) (1,400,456)

Accum Variance (945,000) (1,937,628) (2,980,284) (4,075,491) (5,225,896) (6,434,281) (7,703,568) (9,036,828) (10,437,284)

Operating Surplus (2,928) (1,607) (1,553) (1,546) (1,091) (755) (475) (217) 112

Over the nine year period Council would generate $10.4 million less in cash as a result of the stormwater

charge not being introduced.

The return to an operating surplus would be delayed until 2024/25 and borrowings would be required to

continue funding operations.


APPENDIX A - STATEMENT OF COMPREHENSIVE INCOME

Actual 2014-15 Forecast 2015-16 LTFP 2016-17 LTFP 2017-18 LTFP 2018-19 LTFP 2019-20 LTFP 2020-21 LTFP 2021-22 LTFP 2022-23 LTFP 2023-24 LTFP 2024-25

Recurring Revenue

Rates 20,589 21,664 23,535 24,599 25,712 26,874 28,090 29,360 30,688 32,075 33,526

Fire Service Levies 1,245 1,356 1,402 1,465 1,531 1,600 1,672 1,747 1,826 1,908 1,994

Total Rates & Fire Levies 21,834 23,020 24,937 26,065 27,243 28,474 29,762 31,107 32,513 33,983 35,520

Reimbursements 1,041 1,129 1,139 1,173 1,208 1,244 1,282 1,320 1,360 1,400 1,442

User Charges 2,512 2,756 2,750 2,833 2,918 3,006 3,096 3,189 3,284 3,383 3,484

Grants - Operating 4,111 3,752 3,782 3,895 4,012 4,133 4,257 4,384 4,516 4,651 4,791

Contributions - cash 136 321 310 318 326 334 342 351 360 368 378

Interest 382 260 250 225 239 246 247 254 236 218 211

Other Income 903 1,049 1,098 1,131 1,165 1,200 1,236 1,273 1,311 1,350 1,391

Dividends - TasWater 1,848 1,840 1,848 1,848 1,923 1,961 2,000 2,040 2,081 2,123 2,165

Total Operating Income 32,768 34,127 36,114 37,488 39,033 40,598 42,221 43,918 45,660 47,478 49,382

Recurring Expenses

Materials and Contracts 10,147 8,978 9,274 9,413 9,554 9,697 9,940 10,188 10,443 10,704 10,972

Employee Costs 12,405 13,099 13,794 14,249 14,719 15,205 15,707 16,225 16,761 17,314 17,885

Depreciation 6,977 7,992 8,378 8,773 9,167 9,617 10,029 10,501 10,979 11,457 11,959

Levies to State Government 1,249 1,350 1,402 1,465 1,531 1,600 1,672 1,747 1,826 1,908 1,994

Borrowing Costs 0 0 114 188 483 306 221 175 280 240 200

Other Expenses 4,541 3,661 3,749 3,843 3,939 4,037 4,138 4,242 4,348 4,456 4,568

Total Operating Expenses 35,319 35,079 36,710 37,931 39,394 40,462 41,706 43,078 44,636 46,079 47,578

Underlying Surplus (Deficit) before Capital items (2,551) (952) (596) (443) (360) 136 515 840 1,024 1,399 1,804

Capital and Non-Recurring Items

Capital Grants 663 1,140 1,316 400 400 400 400 400 400 400 400

Contributions - non cash 271 144 144 144 144 144 144 144 144 144 144

Net Gain from Sale of Assets (31) 0 0 0 0 0 0 0 0 0 0

Other Capital Income 22 0 0 0 0 0 0 0 0 0 0

Barretta Levy 1,035 1,040 0 0 0 0 0 0 0 0 0

Grants in Advance 1,007 (1,007) 0 0 0 0 0 0 0 0 0

Carrying Amount of Assets Retired (956) (800) (700) (600) (500) (400) (300) (300) (300) (300) (300)

NET SURPLUS (DEFICIT) (540) (435) 164 (499) (316) 280 759 1,084 1,268 1,643 2,048


APPENDIX B - STATEMENT OF FINANCIAL POSITION


Current Assets

Cash 3,364 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000

Investments 7,194 7,674 7,477 7,969 8,209 8,245 8,457 7,846 7,272 7,025 7,134

Receivables 1,160 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000

Other 183 150 150 150 150 150 150 150 150 150 150

Total Current Assets 11,901 10,824 10,627 11,119 11,359 11,395 11,607 10,996 10,422 10,175 10,284

Non-Current Assets

Land and Buildings 150,849 152,875 154,961 157,110 163,323 165,723 168,195 170,740 173,363 176,064 178,846

Plant and Vehicles 4,149 4,589 5,039 5,489 5,989 6,489 7,039 7,589 8,189 8,789 9,489

Furniture and Equipment 394 744 1,094 1,244 1,444 1,694 1,994 2,344 2,744 3,194 3,644

Infrastructure Assets 348,804 360,882 387,347 413,827 439,532 467,656 497,179 527,694 559,043 591,815 626,023

Intangible Assets 34 41 41 41 41 41 41 41 41 41 41

Investment - Copping Waste Authority 762 750 750 750 750 750 750 750 750 750 750

Investment - Southern Water 91,508 91,508 91,508 91,508 91,508 91,508 91,508 91,508 91,508 91,508 91,508

Total Non-Current Assets 596,500 611,389 640,740 669,969 702,587 733,861 766,706 800,666 835,638 872,160 910,300

TOTAL ASSETS 608,401 622,213 651,367 681,088 713,946 745,256 778,313 811,663 846,060 882,336 920,584

Current Liabilities

Creditors 4,338 4,338 4,338 4,338 4,338 4,338 4,338 4,338 4,338 4,338 4,338

Provisions 2,338 2,396 2,456 2,518 2,581 2,645 2,711 2,779 2,849 2,920 2,993

Loan Borrowings 0 0 6,000 9,300 14,300 6,600 6,000 5,000 7,000 6,000 5,000

Trust Funds & Deposits 1,305 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,001

Total Current Liabilities 7,981 7,734 13,794 17,156 22,219 14,583 14,049 13,117 15,187 14,258 13,332

Non-Current Liabilities

Provisions 609 624 640 656 672 689 706 724 742 761 780

Total Non-Current Liabilities 609 624 640 656 672 689 706 724 742 761 780

TOTAL LIABILITIES 8,590 8,359 14,434 17,812 22,891 15,272 14,756 13,841 15,929 15,018 14,111

NET ASSETS 599,810 613,854 636,932 663,276 691,054 729,983 763,556 797,820 830,131 867,316 906,472

Community Equity

Reserves 350,506 364,846 387,760 414,567 442,662 481,311 514,126 547,306 578,348 613,891 650,999

Accumulated Surplus 249,303 249,008 249,172 248,708 248,392 248,672 249,430 250,514 251,782 253,425 255,473

TOTAL COMMUNITY EQUITY 599,809 613,854 636,932 663,276 691,054 729,983 763,556 797,820 830,131 867,316 906,473


APPENDIX C - STATEMENT OF CASH FLOWS


CASH FLOWS FROM OPERATING ACTIVITIES

Receipts from Ratepayers & Users 28,591 28,994 29,924 31,201 32,534 33,924 35,374 36,888 38,468 40,117 41,837

Payments to Suppliers & Staff (26,403) (25,738) (26,817) (27,505) (28,212) (28,940) (29,785) (30,655) (31,551) (32,474) (33,425)

Interest 370 260 250 224 239 246 247 254 235 218 211

Operating Grants 5,118 3,752 3,782 3,895 4,012 4,133 4,257 4,384 4,516 4,651 4,791

Dividends - TasWater 1,848 1,800 1,848 1,885 1,923 1,961 2,000 2,040 2,081 2,123 2,165

Borrowing Costs 0 0 (114) (188) (483) (306) (221) (175) (280) (240) (200)

Contributions - cash 0 0 0 0 0 0 0 0 0 0 0

Payments to Government (1,274) (1,350) (1,402) (1,465) (1,531) (1,600) (1,672) (1,747) (1,826) (1,908) (1,994)

Net Cash Flow from Operating Activities 8,250 7,718 7,472 8,048 8,481 9,419 10,201 10,989 11,643 12,487 13,386

CASH FLOWS FROM INVESTING ACTIVITIES

Proceeds from the Sale of Assets 460 400 400 400 400 3,900 6,400 3,400 400 400 400

Investment in KWS 0 0 100 100 100 100 100 100 100 100 100

Developer Contributions 512 321 310 318 326 334 342 351 360 368 378

Acquisition of Capital Assets (incl Plant) (7,732) (10,579) (15,796) (12,073) (14,467) (12,017) (12,232) (12,451) (12,476) (13,003) (13,555)

Net Cash Flow used in Investing Activities (6,760) (9,858) (14,986) (11,255) (13,641) (7,683) (5,390) (8,600) (11,617) (12,134) (12,678)

CASH FLOWS FROM FINANCING ACTIVITIES

Repayment of Borrowings 0 0 0 0 0 (3,900) (6,400) (3,400) (1,000) (1,000) (1,000)

Repayment of Community Service Loan 2 0 0 0 0 0 0 0 0 0 0

Receipts from Government - Capital 663 1,316 1,316 400 400 400 400 400 400 400 400

Loan proceeds 0 0 6,000 3,300 5,000 1,800 1,400 0 0 0 1

Net Cash Flow from Financing Activities 665 1,316 7,316 3,700 5,400 (1,700) (4,600) (3,000) (600) (600) (599)

NET (DECREASE)/INCREASE IN CASH HELD 2,155 (824) (198) 493 240 36 212 (610) (574) (247) 109

Cash at the Beginning of the Year 8,343 10,498 9,674 9,477 9,969 10,209 10,245 10,457 9,846 9,272 9,025

CASH AT THE END OF THE YEAR 10,498 9,674 9,477 9,969 10,209 10,245 10,457 9,846 9,272 9,025 9,134

Statutory Reserves (1,030) (1,030) (1,030) (1,030) (1,030) (1,030) (1,030) (1,030) (1,030) (1,030) (1,030)

Descretionary Reserves (3,600) (3,600) (3,600) (3,600) (3,600) (3,600) (3,600) (3,600) (3,600) (3,600) (3,600)

Other Commitments (1,541) (1,500) (1,500) (1,500) (1,500) (1,500) (1,500) (1,500) (1,500) (1,500) (1,500)

Carry Forwards (1,500) (1,000) (1,000) (1,000) (1,000) (1,000) (1,000) (1,000) (1,000) (1,000) (1,000)

UNRESTRICTED CASH AT YEAR END 2,827 2,544 2,347 2,839 3,079 3,115 3,327 2,716 2,142 1,895 2,004

Documents

LONG TERM FINANCIAL PLAN - Kingborough Council...renewal capital expenditure for infrastructure assets over the next 80 years is shown below. The graph illustrates there are peaks